'In Italy, I bet on Enel, Terna, Italgas and Snam'
"All these companies pay generous dividends to shareholders and, as they are indebted, benefit from the low spreads on Italian risk".
3' min read
Key points
3' min read
Political stability helps the Italian market, while in the US it still makes sense to take advantage of the good valuations of technology. This is explained by Luca Bonifazi, branch manager of Valori Am.
What are the most important factors to take into account today when interpreting price movements? There are not only tariffs.
We are living through a very volatile phase, in which the usual macroeconomic variables, central bank decisions and geopolitical risks have been joined by uncertainty linked to the US approach, which rapidly changes communication and decisions at home and abroad. After 'Liberation Day', the market absorbed some of the uncertainty of Trump's messages, although days of strong corrections remain, often accompanied by rises in US government bond yields and weakening of the dollar, a traditional safe haven asset in risk-off phases. In addition to tariffs, we are focusing our attention on US fiscal policy: the pre-announced easing, if it does not revive growth, risks aggravating an already high deficit, increasing pressure on Treasuries, which are close to psychological thresholds (4.50% the ten-year, 5% the thirty-year).
Do you think central bank policy in Europe and the US might change direction?
At the moment it seems difficult for the ECB to change course: we expect two further rate cuts in 2025, in a context of slowing growth and inflation close to 2%. For 2026, the EU economy could benefit from the fiscal measures announced in Germany, leading the ECB to a more cautious stance. In the US, Powell maintains a wait-and-see approach, despite pressure from Trump, while waiting to assess the impact of tariffs policy. An increase in average rates between 10 and 20 per cent could affect inflation, forcing the Fed to revise its strategy. Unlike the market, which expects 2-3 cuts in the second half of the year, I expect the Fed to remain cautious and make at most one.
With all the exogenous variables that determine market performance, how do you assess the actual value of a company and its growth prospects?
In an uncertain and volatile phase like the current one, it is complicated to understand whether a company's valuations are correct or whether it is over- or undervalued. Never before have I considered quality companies to be preferable, leaders in their respective fields, with solid cash flows, competitive advantages and clear forward-looking visibility on business evolution.
What are the sectors that make the most sense to focus on today?
The sectors we are focusing on are financials, which in the US could benefit from the prospects of deregulation announced by Trump and, in Europe - especially in Italy - from the pre-announced consolidation moves, and utilities, which in Europe still have attractive valuations. We also believe it is useful to take advantage of market correction phases to increase exposure to the US tech sector, which in the medium term remains one of the main focuses of large institutional investors.
